One way to improve the financial stability of a family is by creating a financial plan and following through with the process. Savings is one such habit that can help a family in dire times. It provides a financial backstop for life’s uncertainties and gives a feeling of security. It helps with emergencies and purchases and can be a good starting point to financial independence.
We understand the importance of savings to the stability of beneficiaries and as such encourage Village Savings and Loans (VSLA) in our catchment areas: Enugu South, Nkanu West, and Nkanu East LGAs. South Saharan Social Development Organization (SSDO) in partnership with the Catholic Caritas Foundation of Nigeria through the 4GATES Orphaned and Vulnerable Children Program empowers beneficiaries to make healthy decisions to improve stability.
It is not enough to offer quick, one-time donations to beneficiaries. Beyond the emergency period, there has to be a sustainable mechanism to ensure beneficiaries can generate income for themselves. One such avenue is leveraging VSLA.
VSLA is a self-select savings group that uses members’ savings to lend to each other so they can grow their business. This way, members can increase their income, cultivate a savings habit, and imbibe an investment mindset.
This methodology enables members to save weekly or bi-weekly according to the agreed number of shares. It helps build savings that can be reinvested into the business or used to take care of emergencies or general household running.
Benefits of a VSLA
The savings scheme helps increase the income of a household head. When it is time for a savings group member to access loans, they can use the bulk payment to start or fund an existing business.
It teaches members the importance of frugality and the need for savings. Rather than being extravagant, they learn how to invest in business and agriculture.
Current Reality
Under the catchment areas that SSDO manages, there are 64 beneficiaries in three VSLA groups. And they run a cycle of 9 to 12 months.
The Household Economic Strengthening Officer is always on the ground during meetings to supervise the proceedings, monitor the progress, and offer psychosocial support.
